Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court

This story has not been verified, and I am not vouching for it, but it does bring up an interesting point.

The Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed.

Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.

The Court's amended General Order No. 2006-16 requires Plaintiff (Deutsche Bank) to submit an affidavit along with the complaint, which identifies Plaintiff as the original mortgage holder, or as an assignee, trustee or successor-interest.

Apparently Deutsche bank submitted several affidavits that claim that Deutsche was in fact the owner of the mortgage note, but none of these affidavits mention assignment or trust or successor interest.

Thus, the Judge ruled that in every instance, these submissions create a "conflict" and they "do not satisfy" the burden of demonstrating at the time of filing the complaint, that Deutsche Bank was in fact the "legal" note holder.

While the decision is great for homeowners in distress (due to providing a new escape hatch out of foreclosure), it is a big blow to the cause of sorting out the high-finance side of the mortgage mess.
Jacksonville Area Legal Aid Attorney, April Charney, broke this news to us via email and made these comments in regards to the Ohio Federal Court ruling (emphasis ours):

This court order is what I have been saying in my cases. This is rampant fraud on every court in America or nonjudicial foreclosure fraud where the securitized trusts are filing foreclosures when they never own/hold the mortgage loan at the commencement of the foreclosure.

That means that the loans are clearly in default at the time of any eventual transfer of the ownership of the mortgage loans to the trusts. This means that the loans are being held by the originating lenders after the alleged "sale" to the trust despite what it says per the pooling and servicing agreements and despite what the securities laws require.This also means that many securitized trusts don't really, legally own these bad loans.

In my cases, many of the trusts try to argue equitable assignment that predates the filing of the foreclosure, but a securitized trust cannot take an equitable assignment of a mortgage loan. It also means that the securitized trusts own nothing.
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So with this decision, it appears confirmed that investors in the mortgage debacle may in fact own nothing---not even the bad loans they funded! It seems their right to the cash flow from the underlying properties does not extend to ownership of the properties themselves; thus clouding the recovery picture considerably.
Charney further remarked to us:

So they get nothing? that's not going to encourage anymore foreign investments...

Click to expand...

And we need foreign investment? Do you think for a minute that the Deutsche Bank felt bad for those American folks, so let's buy their CDO's and help them get a house.

Quite the contrary, it is all about greed. Snake oil salesmen with promises of 'Real Estate will always go up' to J6P and his wife who are working 2.5 jobs just to feed their kids, and would like to purchase the american dream.

If the requirements for home ownership were like it was in the 60's where you needed 10 - 15% downpayment J6P would have woken up years ago to the fact that he was being underpaid, and chances are things would have never gotten to this point.

But nooo... let's keep him underpaid and give him a mortgage for 15% more than the appraised value, and suck up the interest till he can't pay any more, then we can use the write off as a tax deduction. Meanwhile all the snake oil salesmen have gotten theirs up front, and sure don't give a damn.